The Caterer Interview – John Penrose

01 December 2010 by
The Caterer Interview – John Penrose

Having spoken tub thumpingly about tourism in the summer, the coalition Government has expressed its desire to engage, encourage and promote hospitality and tourism. But with pressure on all public spending, can we really do more with less? Minister for Tourism John Penrose tells James Stagg how the industry can work in partnership with publicly funded bodies to multiply the effects of any marketing

As an MP for a coastal resort you will have some idea of the problems facing the industry. What issues do hospitality businesses in your constituency most raise? They're pretty typical. They want more feet on the street, bums on seats and heads in beds. They know we are facing an ever more globalised and competitive world.

Even when you're talking about a B&B on the Locking Road in Weston Super Mare, while their main concern may be the future health of their resort and the investment they're making in their property, they know that Britain has to compete with an ever greater number of destinations abroad.

They're pretty realistic, well versed in what the issues are and they're good at what they do.

How does the coalition Government intend to better engage with the industry? I hope we've got off to a pretty good start. Getting a prime minister to give a tourism speech like David Cameron did, let alone in the first 100 days of the administration, indicates the seriousness with which we're taking the sector. That, along with the fact that there is a minister whose title starts with tourism for the first time in goodness knows how many years, shows we're serious.

There's a lot to do - there are a series of big international events coming up - so I've got my work cut out.

David Cameron said in August that the Government would build the "strongest possible tourism strategy" by the end of the year. What initiatives have you been working on with the industry to boost the UK's competitiveness? The strategy was duly finished and has gone to approval at Number 10. We can't announce it yet as there are some things we're still working through.

But some things do show the direction we're heading in. First, the idea about trying to focus VisitBritain on driving inbound tourism. This is what they were doing but it's now the alpha and omega. It's also trying to equip them to make sure there's a proper partnership marketing opportunity.

So if we've got £50m of marketing money over the next four years can we come up with a partnership marketing scheme with major players in the industry matching that funding.

We will also have the wind at our backs because we've got the Olympics coming up, then the Commonwealth Games in Glasgow in 2012, another Ryder Cup, two different Rugby World Cups, a Royal Wedding and a Diamond jubilee. So there's a heck of a lot of things that would bring people here even without the new marketing stuff.

The prime minister also spoke of a new approach to tourism. What has changed? If it was just more engagement then it wouldn't be enough. The next point is partnership marketing. It is not just VisitBritain that will be doing partnership marketing; we also want to drive domestic tourism.

One concern is that as a nation we don't value the amazing opportunities we have on our doorstep. We go abroad more than any other nation and stay at home less. Yet we are one of the world's most popular tourism destinations for people outside the country. Somewhere we're missing something.

Partnership marketing allows firms in individual destinations at a local and national level to cooperate and promote their part of the country to draw people there. It's something we've done occasionally in the past and it has worked well but it has not been a part of what we've been doing in all cases.

We have one of the highest rates of VAT on hotel rooms in western Europe, and this is set to rise further in January. How is this compatible with creating a more competitive industry? People always talk about VAT when it goes up by 2%. Strangely, I never get people calling up to say isn't it wonderful that the pound has fallen by 8%, which is far more valuable.

There are some things working in the opposite direction that have swapped the impact. But that's not the whole story.

But the Government is working towards strengthening the pound and VAT won't necessarily go down in correlation. Absolutely right. I'm a free-market Tory and every time a tax goes up a little part of me dies - but we have to make the books balance. So I hope that, while nobody likes the notion of raising taxes, everyone understands it was painfully necessary.

Nothing would give me greater pleasure to be able to announce VAT reductions for the industry] but we can't for the reasons I've described.

What is the Government doing to reduce red tape and excessive business taxes? Chancellor George Osborne has already announced reductions to parts of corporation tax and the employer contribution to national insurance, showing the direction we'd like to go.

Some regulations are important and are there for a good reason - we don't want to get rid of those - but we want to apply them with a lighter touch and get rid of things that are pointless.

My request to the industry is: if you can come up with specific examples of a regulation making life a misery because of form filling that's always in duplicate or the like, let me know through trade bodies such as the British Hospitality Association.

For me to be able to cut this stuff and reduce its cost and the time it takes we need to know the exact examples.

The decision to close the London Development Agency (LDA) in 2012 after restricting its budget next year will effectively remove funding for Visit London. Will alternative funding arrangements be explored? There are a couple of things we need to do. We are in discussion with Mayor Boris Johnson and a number of other government departments about the Visit London question.

From the point of view of promoting London in the run-up to 2012 and beyond, the Olympics will be a brilliant recruiting sergeant to bring people into the city.

But that doesn't mean we aren't at risk of displacement around the 2012 Olympics. That's where the VisitBritain campaign comes in, promoting the UK as a whole and that obviously includes London. If we promote the UK as a whole, London will make out like a bandit from that. If we get it right for the UK, London will do well.

So there's no need for Visit London, VisitBritain will take the slack? I'm not saying there's no need for Visit London, absolutely not. Visit London will still be needed in future. All I'm saying is VisitBritain will be doing a lot of the inbound marketing to bring people in from abroad. Visit London will still want to promote London as a destination both to people within Britain and those arriving as part of the VisitBritain campaign. All I'm saying is that we have other contingencies in place and VisitBritain is part of that.

In light of the migration cap, what would you say to those trying to find the highly trained staff they need? If you want to bring in a three-Michelin-starred chef, the cap is not aimed at those people. If, on the other hand, you want to bring in a short order cook who prepares a bit of French food, then I think we are entitled to ask as a country trying to recover from recession with a number of long-term unemployed why can't we train our own here. That would apply equally Italian food, French food, Indian food, Chinese food, etc.

I think most of your readers will have a hard time believing it's impossible to train someone from London or Bristol or Bradford to cook decent Indian food. The argument gets progressively weaker the further you get from rock star chefs.

Don't profiteer from the Olympic

John Penrose warns hospitality businesses that the temptation to hike prices to take advantage of the influx of tourists during the 2012 Olympics should be resisted.

"It's not just the people here watching the sport for that fortnight, it's the billions of people watching on TV in what could be the biggest TV audience the planet has ever seen. That's a great way to showcase the UK."

Penrose believes that the UK has a chance to appeal to the vast television audience and convince them that they should holiday in the UK in the years after the games.

"It's not making out like a bandit and jacking prices up for the fortnight of the games itself," he adds. "It's about being careful and responsible and creating a really good impression of a great value, well-run, professional, brilliant place to visit so that everybody that wasn't there wants to come. We will be on show it's vitally important we create the best impression."

By James Stagg

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